ECB: Alternative policies - Westpac

Sandeep Kanihama FXStreet Contributor

According to Tim Riddell, senior market strategist at Westpac, after ECB extended forward guidance and detailed their TLTRO program, Draghi acknowledged that further easing measures had been discussed, balancing that with policy normalisation.

Key Quotes

“The fact that such discussions took place has subsequently been repeated by other ECB officials. Next week’s annual ECB forum in Sintra could allow alternative policies to be aired, but with Draghi due to step down before year end, the profile is likely to err on continuity of policy.”

“Italy’s coalition seems to have found some common ground to act cohesively towards EU over their budget. This might allow survey and activity data to have more of an influence on EUR.”

“Trump’s threats of US sanctions over the oil pipeline from Russia to Germany may have caused EUR to pull back, but unless this escalates, the dynamics in CB policy differentials is actually skewed towards a more stable ECB and easing FOMC.”

“Unless Trump’s threats intensify or Italy becomes more irascible over its EU budget discussions, EUR/USD may well find support in the mid-1.12s and could squeeze into the upper half of its 1.11-1.16 range.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD trims gains, hovers around 1.1900 post-US data

EUR/USD trades slightly on the back foot around the 1.1900 region in a context dominated by the resurgence of some buying interest around the US Dollar on turnaround Tuesday. Looking at the US docket, Retail Sales disappointed expectations in December, while the ADP 4-Week Average came in at 6.5K.

GBP/USD comes under pressure near 1.3680

The better tone in the Greenback hurts the risk-linked complex on Tuesday, prompting GBP/USD to set aside two consecutive days of gains and trade slightly on the defensive below the 1.3700 mark. Investors, in the meantime, keep their attention on key UK data due later in the week.

Gold loses some traction, still above $5,000

Gold faces some selling pressure on Tuesday, surrendering part of its recent two-day advance although managing to keep the trade above the $5,000 mark per troy ounce. The daily pullback in the precious metal comes in response to the modest rebound in the US Dollar, while declining US Treasury yields across the curve seem to limit the downside.

XRP holds $1.40 amid ETF inflows and stable derivatives market

Ripple trades under pressure, with immediate support at $1.40 holding at the time of writing on Tuesday. A recovery attempt from last week’s sell-off to $1.12 stalled at $1.54 on Friday, leading to limited price action between the current support and the resistance.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.